Business Insurance - The Importance of Business Liability Insurance
Personal Liability
We all have responsibilities when it comes to living in a society. If you own a home, you must maintain it properly to avoid affecting the value of other properties in your neighborhood. If you drive a car, you must operate it in a reasonable manner to make sure you are putting no one at risk of injury. If you own a company, you must conduct business in a fair and safe manner. Failing to abide by these societal expectations can cost you, both personally and professionally. The purpose of insurance is to protect the person or the business entity from financial harm.
Business Insurance Plan
Owners of a business should have a plan to protect the assets of the company as well as those of the individual owners. While there are many types of insurance for small business, here are the primary categories:
- Property insurance
- Liability insurance
- Health insurance
Business Property Insurance
Property insurance offers protection against loss or damage, whether by theft, natural disaster, or accident. A policy will protect both the physical building and its contents, and most insurers will cover items that are lost or stolen even after they have been removed from the premises—a laptop computer that accompanies you on a business trip, for example.
Three Basic Types of Business Liability Insurance
Even as the “protected” owner of a corporation or LLC (limited liability company), there are still circumstances where you can be held personally responsible for damages. For example, you may have signed a personal loan guarantee for your business. You may have caused an injury to someone through direct action or negligence, or did something illegal or irresponsible. In these instances, the corporate umbrella may not protect you from suit.
